Oil May Allow Sudan to Escape Sanctions’ Pain

Wednesday

May 30, 2007 at 5:42 AM

U.S. sanctions aim to squeeze Sudan’s economy by freezing its companies out of American financial institutions.

JAD MOUAWAD

The Bush administration’s new sanctions against Sudan aim to squeeze the country’s economy by freezing Sudanese companies out of American financial institutions and curtailing their dollar transactions.

Administration officials described the sanctions as a significant move to raise the pressure on Omar Hassan al-Bashir, Sudan’s president, to bring a quick end to the violence in Darfur.

But the sanctions will do little to stem Sudan’s oil exports, which are the main source of the country’s wealth, analysts said. They also noted that existing sanctions against Sudan, which date back to 1997, have been unevenly enforced.

“Sudan has been quite adept at avoiding sanctions for the past decade, and this is not going to have a lot of bite,” said Philippe de Pontet, a political risk analyst at the Eurasia Group in Washington.

In recent years, Sudan has emerged as a small but fast-growing oil producer, first with the help of American and European corporations and more recently with investments from Chinese, Indian and Malaysian companies. Sudan now pumps about 500,000 barrels of oil a day, bringing in enough wealth to set off an economic and real estate boom in Khartoum, the capital.

The latest sanctions are specifically aimed at more than 30 companies owned or controlled by the government of Sudan. They include five petrochemical companies and the country’s national telecommunications operator, Sudatel.

More than 100 local companies have already been blacklisted by the United States Treasury Department., among them Sudan’s biggest oil producer, the Greater Nile Petroleum Operating Company.

The company, which pumps about 300,000 barrels a day, is a joint venture of the Sudanese government and state oil companies from China, India and Malaysia, and is operated by the China National Petroleum Corporation.

Andrew S. Natsios, the special envoy for Sudan, acknowledged at a news conference yesterday that the new sanctions would have limited effects on the country’s oil production and exports.

“The purpose of these sanctions is not sanctions,” he said. “The purpose of these sanctions is to send a message to the Sudanese government to start behaving differently when they deal with their own people.”

At least 200,000 people have been killed and more than 2.5 million displaced in Darfur, a region in western Sudan. The White House has called the violence there a genocide.

In a brief speech in the White House yesterday morning, President Bush said: “The United States will not avert our eyes from a crisis that challenges the conscience of the world.”

The European Union has signaled its willingness to consider new sanctions against Sudan, but China and Russia have been opposed. Without an international consensus on more stringent economic sanctions, the United States has few options, analysts said.

“We don’t have much commercial activities or fat targets of opportunities for slapping new sanctions on Sudan,” said J. Stephen Morrison, director of the Africa program at the Center for International and Strategic Studies in Washington.

The companies named by the Treasury Department yesterday include a sugar producer, an automobile company and a vegetable oil producer. The administration also singled out two senior officials — Ahmad Haroun, state minister for humanitarian affairs, and Awad ibn Auf, the country’s director of military intelligence — and Khalil Ibrahim, leader of a rebel group called the Justice and Equality Movement.

A Sudanese foreign ministry spokesman called the sanctions “unfair and untimely.”

According to The Associated Press, South Africa’s ambassador to the United Nations, Dumisani S. Kumalo, questioned the timing of the sanctions at a time when the United Nations, the African Union and Sudan are negotiating access to Darfur for an increased international force.

The Bush administration said it would seek a new United Nations resolution imposing an arms embargo against Sudan and would bar the Sudanese government from conducting any military flights in Darfur.

But in aiming at Sudan’s economy, Washington seems to be toeing a sensitive line. It wants to increase the pressure on the Sudanese government without alienating China, a top American trading partner. It is also apparently unwilling to consider outright oil sanctions against Sudan at a time when global energy prices are high.

“The U.S. does not want to alienate China and it doesn’t want to take steps that take oil off the market, especially in the current environment,” said Mr. de Pontet of the Eurasia Group.

Yesterday, oil futures in New York fell $2 a barrel, to $63.15, after Nigerian oil workers ended a strike.

David Rubenstein, executive director of the Save Darfur Coalition, said the United States should make Sudan a higher priority in its diplomatic relations with China. “The Chinese have the most leverage to influence Khartoum,” he said.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.